More than 2,500 education, national security, health, science, labor, and other domestic groups and organizations called on Congress on Thursday to raise the caps on domestic federal budget programs and to work together on a bipartisan compromise to avoid the dire impacts of continued budgeting under sequestration.

Coordinated by NDD United, a coalition of organizations representing a variety of domestic programs, the letter released Thursday encouraged Congress to come to the table to develop a budget plan that provides support for critical domestic programs.

As background, the federal budget is divided into mandatory and discretionary funding. Mandatory spending provisions are set by Congress and include “entitlement programs,” or programs that define participation based on specific eligibility, such as Social Security, Medicare, and some Pell Grant funding. Entitlement spending makes up approximately two-thirds of federal spending. Other student aid programs and the bulk of Pell Grant funding is classified as “discretionary spending.” Discretionary funds are appropriated annually by Congress, meaning funding can vary from year to year based on congressional action or inaction.

Discretionary funding includes most of all major government programs, ranging from public health to homeland security to education to defense. Organizations with interests outside of the defense sector joined together to form NDD United at the impetus of the Budget Control Act (BCA) in 2011. The BCA automatically cuts from both defense and nondefense discretionary until 2021. These automatic cuts, called “sequestration,” are the result of a failure of a congressional committee to reach a budget compromise. The Murray-Ryan budget deal in 2013 suspended some of the cuts--but only through the end of fiscal year 2015. Without renewed budget negotiations to raise the caps on spending, non-defense discretionary programs will again face the impact of automatic spending cuts.

“Cuts to...vital NDD programs exemplify the need to replace sequestration with a balanced approach to deficit reduction that does not include further cuts to NDD programs, which have already done their part to reduce the deficit,” the letter noted. “Such sequestration relief must be equally balanced between nondefense and defense programs, as strong investments in both NDD and defense are necessary to keep our country competitive, safe, and secure.”

So far, Congress has made little progress in negotiating a budget for fiscal year 2016, which begins on October 1. With a very busy month ahead, Congress is running out of time to develop and pass a new budget proposal through the House and the Senate. If no agreement is reached, the federal government will shutdown on October 1. Federal student aid programs are forward funded, however, meaning negotiations over spending levels for fiscal year 2016 would impact award year 2016-17.

Because of the limited time remaining to negotiate a deal, the most likely scenario still left on the table is a short-term continuing resolution (CR) that would sustain federal spending at current levels until a longer-term budget agreement can be hashed out, most likely in December, according to a report in Politico. While a CR may appear to be the easiest budget action right now for Congress, emerging controversy over federal funding for Planned Parenthood may muddy the waters, and, if left unresolved, lead to a government shutdown.

As Congress continues to negotiate toward a federal budget for fiscal year 2016, stay tuned to Today’s News for updates from NASFAA’s Policy and Federal Relations Team on how potential budget proposals could impact student aid programs and join the conversation on social media channels using #RaisetheCaps.

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